Globalization involves of interaction amongthe people, companies, and government of different nations for internationaltrade, investment and aided by information technology. Globalization alsoinvolves transfer of policies, culture, power, trade and market all around theworld. Globalization is not new, it has been started from thousands of yearsago where people use to buy and sell their things either from great distanceslike as Silk Road across Central Asia that connected China and Europe.
Current wave of globalization issimilar to those prevailing before the First World War broke out in 1914.Thepolicies and technological developments of past few decades have changed andincreased in cross-border trade, investment and migration. So, some observersbelieve that world has entered in a new phase of economic development. Manygovernments have adopted free-market economic systems, vastly increased theirown production potential and creating new opportunities for international tradeand investment.
Government has also reduced the barriers to commerce and haveestablished international agreements in foreign markets. A defining feature ofglobalization is an international industrial and financial business structure. Advancement in informationtechnology have dramatically transformed economic life. Valuable new tools oftechnology have identified the purchasing economic opportunities, includes easytransfer of assets and collaboration with partners. To find the right balancebetween benefits and costs of globalizations people need to know the policiesof globalization and its impacts on economy. Globalization shrinks the wholeworld and shorter the distance to interact one person on one side to the other.Global trade is having a radical impact on employment relations, trade andinvestment in the whole globe.
Globalization can affect both negatively andpositively on employment, labor, investment, market and trade. A global marketis the network that links the labor, production and such networks link all theworkers with in the world economy. A big positive effect of globalization ininformal economy is that it provides job opportunities in the market.
Globalization although has increased trade liberation in the world economy. Globalizationresult economic growth and industrialization and expanding in both developedand developing countries. Globalization has caused a hugechange in market and trade for different investors. There are three basic elements ofglobalization for an economy. (Khan, A.
R. 1998).· First, is the increase in the flow ofgoods nationally because of reduction in tariffs. · Secondly, there is an increased in themobility of assets due to low tariffs. · Third, is the consistency in technologywhich have increased he international trade flow.
Globalization also increase thegrowth, distribution of income, reduce poverty according to the standard theoryof trade. Globalization integration leads to resource allocation withcompetitive advantage with greater efficiency and higher output. (Khan, A. R.1998).
Globalization is an unavoidable process because it has it has connectedall the markets at a single point. Global market is a complex and a richconnectivity (Mattsson, L. G.
2003). Globalization and distribution of goodsand services are linked because all the flow of goods and information have tobe coordinated across the borders. Main types off linkage between globalizationand distribution are as followed: (Mattsson, L. G.
2003).· Firstly, distribution specialistsglobalize, middleman like whole seller and retailer globalized as their owngrowth strategy. · Secondly, globalization of manufacturingcompanies created coordination between distribution and manufacturingactivities.
· Third, globalization of retail firmsdrives globalization of manufacturing firm that sell from retailer. Brandmanufactures faces great difficulty when their retailer globalize. Fourth,development of electronic commerce it has an effect on national market Global Forces in the market arehaving a great influence on economy. Great mission of international economicorder based on the principles of non-discrimination and free trade byInternational Trade Organization (Delbrück, J. 1993). Telecommunicationhas increased globalized international markets particularly in financial markets.
Means of globalization have decentralizedthe market-oriented approaches. This has also reduced the cost of production, transformationand holding the inventory but over all it has make the earth a global village forthe economy .It has created an economic vast change in the growth for the wholeworld and its economy.